blockworks.co
Community governance at open source liquidity protocol Aave is voting to determine whether it should activate its V3 Ethereum pool. Still running on Aave V2, today, the Ethereum pool is by far the largest, with $5.6 billion in total value locked.
Aave V3 was deployed in March 2022 onto various networks including Polygon, Avalanche, Arbitrum, Optimism, Fantom and Harmony. But the Aave community wrestled with how best to handle the massive Ethereum pool.
There were two main options: one was to upgrade existing V2 contracts to the new V3 code, and the other was to deploy new V3 contracts and leave existing V2 deployment unchanged.
Upgrading would have allowed the protocol to keep the addresses of key contracts (such as Pool, Addresses Provider, aTokens, debt tokens, etc.) but would be technically difficult to implement. The second option — deploying V3 contracts and leaving V2 contracts unchanged — was safer, but it places the burden of moving deposits to V3 on Aave users.
“Upgrading the Aave Protocol Ethereum V2 to V3 market directly would have indeed created some seamless experiences for the users, at the same time creates an event that would require lot of security procedures and places substantial assets at risk,” Stani Kulechov, founder and CEO of Aave, wrote.
Kulechov leaned toward creating a completely new market, as he believed it was more resource efficient and gave the Aave community more time to review assets within the protocol.
“Most importantly, [a] new market would be [a] safer solution and adds less risk,” Kulechov wrote.
The community ultimately agreed with Kulechov and voted in favor of this option — deploying a new V3 pool instead — with 99.9% of voters in agreement.
If the latest proposal is approved, it will activate the Aave V3 Ethereum pool which includes the listing of WBTC, WETH, wstETH, USDC, DAI, LINK, and AAVE tokens.
At the time of writing, 100% of votes cast so far are in favor of activating the V3 ETH pool, but the vote has not yet reached quorum. Voting on the proposal will end in two days.
A spokesperson for Aave was not immediately available for comment.